Let me get this out of the way upfront: I hate going to conferences.
In my experience, the average conference operates on a 1:3:12 ratio of substance to bullshit to someone trying to sell me something I don’t need for a problem I don’t have. Too many of the conferences I’m invited to are simply sales pitches disguised as “thought leadership” hosted by “luminaries” and “innovators” when what they’re really presenting are recycled ideas hawked by the used car salesmen of the digital world. The rare exceptions that proves the rule are the events hosted by MIT’s Center for Digital Business and their Initiative on the Digital Economy (IDE). This is where leaders from all industries come to discuss business of the future, and where I found myself last month.
On July 10, I attended the Platform Strategy Summit–my second conference on digital business at MIT–and instead of walking away with business cards and sell-sheets I walked away with ideas and questions. To me, those are two of the most valuable takeaways from any interaction.
THE PLATFORM STRATEGY SUMMIT, AN OVERVIEW:
The Summit focused on how platform-centered markets (MIT’s Innovation@Work: Why Platform’s Beat Products Every Time) impact the economics and management of corporate strategy in today’s digital world. Naturally, we talked a lot about Air BnB and UBER as the creme de la creme of platform business models, but we dove deeper into other industries I’d never have guessed had platform players (John Deere comes to mind) and exposed some significant learnings about how platform-based businesses are cannibalizing out-dated product and service based business models.
“Since 2000, 52% of Fortune 500 companies have disappeared.”
– Paul Daugherty, CTO of Accenture
I was shocked to hear Paul Daugherty, CTO of Accenture, announce that 52% of Fortune 500 companies have disappeared since 2000, and that those companies have largely been firms who couldn’t make the transition from product to platform. In fact, in 2013, 14 of the top 30 global brands by market capitalization were platform-oriented companies.
That was two years ago, imagine what the matrix of business models will look like five or even ten years from now.
Hands down, the most charismatic speaker of the day was Luis von Ahn, CEO of Duolingo. He has his own great personal story–from creating the reCAPTCHA to selling the company to Google for an undisclosed amount–and captured everyone’s attention with the story of his new company, Duolingo. The more he spoke about how his company’s app is helping to change the world the more you could hear the opening jingle from people downloading Duolingo on their iPhones.
The Summit was chaired by Geoffrey Parker, Professor of Management Science at Tulane University and Research Fellow at the MIT Initiative for the Digital Economy, along with Marshall Van Alstyne, Professor of Information Systems at Boston University and Research Fellow at the MIT Initiative for the Digital Economy. Along with Strategy Summit co-chair Sangeet Paul Choudary, they are co-authors of Platform Revolution: How Networked Markets Are Transforming the Economy—and How to Make Them Work for You.
“Platforms have begun to absorb what were previously government functions. Some of the areas include monitoring, incentives for good behavior and the exclusion of bad actors.”
– Geoffrey Parker, Tulane University
The rising power of platforms–and how companies like UBER are able to influence market regulations–makes one wonder what the relationship between governments and platforms will be in the future. Platforms are more nimble and adapt lightyears faster than anything in government could ever hope, and part of me wonders if this could be the beginning of a technologically advanced Adam Smith inspired utopia. Without a doubt, platforms are shaping public policy right now and government will have to work closely with the private sector to make sure they adapt to a platform-centered ecosystem.
It’s rumored that next year’s business conference will be centered around how the Internet of Things (IoT) needs a platform perspective to realize its promised benefits. As Parker said in a recent interview, “much of the effort around IoT has been about developing the technologies needed to link machines to networks. What has mostly been missing, however, is the economic logic that would make companies want to deploy the technologies and the incentives to make developers want to innovate on top of IoT technologies. Next year is likely to be the year that platforms really break into the public’s consciousness.”
TWITTER HIGHLIGHTS FROM THE SUMMIT:
— Bryan Kirschner (@bryan_kirschner) July 10, 2015